16 BULLETIN 1106, U. S. DEPARTMENT OF AGRICULTURE. 
the management of its affairs and, “To provide therein the terms 
and limitations of stock ownership.” It was held that a by-law 
which provided that, “ No stockholder shall transfer his stock with- 
out first giving the corporation 90 days’ notice and, option to 
purchase said stock at par plus the accrued and undivided dividends 
which are payable per share” was valid. The by-law was referred 
to on the face of the certificates of stock. 
A similar conclusion was reached in an Ohio case involving an 
analogous statutory provision.‘7 Where the statute under which 
an association is incorporated authorizes the inclusion in the articles 
of association or the certificate of incorporation or in the by-laws of 
a provision restricting the transfer of its stock, such a provision 
will be enforced by the courts of the State where suit is brought, 
although the association was incorporated in another State. These 
were the facts in the case last mentioned. In that case the corpora- 
tion was incorporated in Delaware, but the transactions relative to 
the stock took place in Ohio, where the corporation had its principal 
place of business, and the suit was brought there. One is charged 
with notice of the law of the State under which a corporation is 
incorporated and of its powers. Even though a by-law restricting 
the right to transfer stock is unauthorized by the statute under 
which the corporation is formed, they have been enforced as con- 
tracts between the corporation and its members,** although a con- 
trary conclusion has been reached.*® It is not believed that an 
absolute prohibition on the transfer of stock in an unauthorized 
by-law would be upheld. Shares of stock at common law are re- 
garded as personal property, and as such all the rules of law rela- 
tive to such property are applicable. The policy of the law is 
against prohibitions or such as have that effect on the transfer of 
property, on the theory that the right of sale or disposition is an 
inseparable incident of its ownership. But the law permits some 
restrictions on the right of sale or transfer of real or personal prop- 
erty.°° Ina case decided by the Supreme Court of the United States 
it was said that “In',*, *..* a Jomt stock corporation —° a." ae 
each stockholder whether by purchase or original subscription has 
the right, unless restricted by the charter or articles of association, 
to sell and transfer his shares and by transferring them introduce 
others in their stead.** 
47 Nicholson v. Franklin Brewing Co., 82 Ohio 94, 91 N. E. 991, 19 Am. Cas. 699. 
48 New England Trust Co. v. Abbott, 162 Mass. 148, 38 N. E. 432, 27 L. R. A. 271;; 
Clothing House v. Dickinson, (Minn.) 178 N. W. 957. 
49 Steele v. Farmers & Merchants Mutual Tel. Assn., 95 Kan. 580, 148 Pac. 661. 
50 Lathrop v. Merrill, 207 Mass. 6, 92 N. E. 1019; Gray Restraints on the Alienation 
of Property, (2d ed.) p. 399. 
51 Morgan v. Struthers, 131 U. S. 246, 254. 
